FCC Seeks Comment on Mobility Fund Proposed in National Broadband Plan

The FCC approved 5-0 a rulemaking notice on a mobility fund to become part of the Universal Service Fund. The NPRM also seeks comments on reverse auctions to select carriers to build out 3G networks in unserved areas at a competitive cost. The program would not expand the size of the USF, and it would be paid for from funds that Verizon Wireless and Sprint Nextel voluntarily surrendered as merger commitments. The fund will be small, FCC officials acknowledged, offering as little as $100 million -- about 1/40th the amount already handed out by the federal government through Recovery Act programs.

The mobility fund was recommended in the National Broadband Plan, along with creation of a Connect America Fund, which would refocus USF as a broadband program.

"This is the first time that the commission has identified the mobility gap as a problem to solve and that’s a big deal,” Chairman Julius Genachowski said at a news conference after the commission meeting. “The people who say that to completely address the mobility gap will cost more money than we're proposing at this point are right.” He said this is the first FCC proposal for reverse auctions for USF. The fund is designed “as a one-time capital infusion to make a dent in the mobility gap,” Genachowski said. “The idea is there are areas adjacent to existing networks where the issue really is the one-time capital infusion required to put up a tower” and install equipment.

"Over four million Americans live beyond the reach of the current generation of mobile service,” said Wireless Bureau Chief Ruth Milkman. “Their homes, as well as many places where people work and travel, fall into gaps in mobile networks that persist due to numerous factors, such as challenging terrain, long distances from existing networks and low population density.” The Wireline and Wireless bureaus will come before the FCC in coming months with more proposals for extending mobile coverage, Milkman said. While the money proposed in the NPRM is for a one-time-only fund, the notice seeks comment on whether the FCC should consider a new funding round later.

Wireline Bureau Chief Sharon Gillett said the reverse auction proposal draws on the agency’s expertise in developing mechanisms of this kind in selling spectrum.

Commissioners Meredith Baker and Robert McDowell expressed concerns about the fund proposal. “Operationally, I have a concern as to whether a one-time support mechanism will prove sustainable to provide mobile broadband services in unserved areas, or whether this effort will lead to a future further drain on resources to maintain the expanded infrastructure,” Baker said. The fund should not be the FCC’s only initiative to promote mobile broadband in rural America, she said.

"How can the commission ensure that a new program does not result in an increase in the overall size of the universal service fund?” McDowell asked. “How can the commission ensure that applicants are selected in an objective manner, in keeping with Congress’ intent for the overall auction process? In the same vein, how can the commission ensure that the most remote parts of the country are not left behind?"

Commissioner Michael Copps said the fund is “a much-needed down payment on closing America’s digital divide.” Copps recalled a recent vacation to China, which included a cruise down the Yangtze River. “I was almost never without 3G service,” he said. “The sight of that 3G signal along the top of my BlackBerry screen almost everywhere we went on our trip made quite an impression on me. I dare say there are many places in the United States -- and they're not just river valleys, either -- where I wouldn’t find that kind of service.”